Shoprite boss challenge retailers

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Shoprite chief executive Whitey Basson has thrown down the challenge to retailers not to use the drought gripping South Africa as a reason to increase food prices.

Basson said the Shoprite Group would act “strongly in the interest of consumers and not tolerate food price increases which were not based on fundamentals”.

He said, although there was no doubt the drought and the weak rand had pushed up food inflation, there were signs that upward pressure on food prices could be starting to ease.

South Africa has been in the grip of a drought that has seen food prices soar, mostly affecting the country’s poor. It is the worst drought in decades, with the South African Weather Service announcing in January that last year was the driest year on record. Despite recent rainfall, dam levels remain critically low, with the province’s dams at 31percent capacity this week.

In a statement, Shoprite said that once relief from the drought occurred, basic commodity prices would normalise and, combined with the rand’s recent recovery against the US dollar to levels last seen in August, the price of imported products would also start easing. The businessman added that some food prices had already stabilised.

The Consumer Action Network recently accused food manufacturers and retailers of artificially inflating the price of bread in the country.

According to the group, the price of bread across several brands has increased by 7 percent over the past year despite Grain SA noting there was no price decrease when international wheat prices were lower.

Regarding bread, Basson said Shoprite had locked its brown bread at R4.99, a lower price than one year ago, to alleviate the burden of rising prices.

He said the reduced price on bread and other products, which include pork and frozen vegetables would be maintained for an extended period to cushion the blow of inflation.

Pick n Pay’s group executive of strategy and corporate affairs, David North, said the retailer did everything it could to keep food prices as low as possible.

 “Over the past year, we restricted our selling price inflation to 3.1 percent, well below CPI food inflation of 5.3 percent.

“We achieve this by being more efficient, enabling us to pass on cost savings to our customers through lower prices. We work hard with our suppliers to ensure that any price increases are only justified by rising input costs, “said North.

Recently, a Hanover Park mother told the Cape Argus she was forced to leave her groceries at the till when she found she could no longer afford everything on her grocery list because of increasing food prices.

North encouraged customers to buy food products that had been affected less by the price increases.

CAPE ARGUS

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